the new york dollar and its relation to scholars

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I just love New York Magazine. It provides me with everything I want to know about New York City, from restaurants to entertainment to politics to fashion. It even has a separate section online for shopping, apart from fashion. How lovely! The writing style is intellectual yet approachable, and if you have a sense of humor, you’ll be sure to catch onto the that of the magazine, as well. Whenever I decide to spend my own money on a magazine subscription and stop mooching off my parents’ regularly delivered issues, New York Magazine will be on the top of my list.

I answered the various questions relating to my lifestyle in “the next 10 years” (I pretended it was going to be the next 15-20 years because I’m only 20 now!). Thanks to good ol’ NY Mag, I now know that I need to earn $1 million to live the life I aspire to have one day in New York City. Can you beat me?

As made clear by my previous posts, New York’s cost of living is considerably higher than essentially any place in America. However, the cost of actually living in New York City also must be discussed. In Moving to Manhattan, I explained the differences in rents among the city and to touch upon it a bit more…

Some families choose to sacrifice what they could have in other towns to live in New York. I know a family of 4 living in a one-bedroom apartment. Now, they do live in the heart of the West Village, a dream of many, but I’m sure people usually think the parents would at least want their own bedroom. This family has been doing this since their kids were born, now 8 and 11 years old, and they seem to be perfectly satisfied with their lifestyle. The bedroom consists of a full or queen size bed (I can’t remember which one) for the parents and a bunk bed for the boy and girl.

I don’t know what they rent is, but this is quite the sacrifice to make to live in one of the nation’s most sought-after neighborhoods. They could probably settle for a small house in the surroundings suburbs or get a less expensive, bigger place in a different neighborhood or even borough. I just wonder what will happen when the kids get older and want to bring home their girlfriends/boyfriends… Uh oh.

If you’re seeking to live a well-off lifestyle in New York City when you get older, you better plan to have a very well paying job and marry rich. (This goes for guys and girls.) A New York Times article called “You Try to Live on 500K in This Town” explains just how expensive New York can be. After calculating costs of private school, mortgage, nanny, and co-op maintenance fees, the article states, “We are already at $269,000, and we haven’t even gotten to taxes yet.” Now, the expense listed in this article may seem a tad excessive to some, but to many in New York, these things are parts of the lifestyle they are accustomed to.

The Value of a New York Dollar

New York’s high cost of living is partially due to it’s low dollar value. In a New York Magazine article, “The Value of a New York Dollar,”the New York dollar was stated as being worth only 76 cents. That measly amount was calculated back in 2006, was when the article was published. Because of a number of factors, including regulations and zoning, housing caused the dollar’s value to drop 14 cents. Taxes drag its value down 5.6 cents, while basic costs like the higher prices in New York, decrease it even more by 4.4 cents. These are all further explained in the article, as well as the difference in lifestyle costs and wages.

The money you earn and spend in New York does not go as far as it does in other cities. The New York Dollar is, by definition, “calculated by subtracting the additional cost of living in New York, and then adding back the additional income residents tend to command as a result.” It’s common knowledge that the cost of things in large cities are going to be more expensive than in small towns. But do you know just how big this price difference is?

The cost of living in New York City is much higher than it is in other cities. However, the salary one earns in the city also is higher in comparison. (Though, it may not always be high enough to accommodate the difference of cost of living.) For instance, an Information Technology Director living in Tallahassee, the capital of Florida, has a median income of $147,493, according to Salary.com, while a person who holds the same position in New York, NY earns a median income of $193,881. To find out how far your salary can go in any city, take a look at the CNN Money Cost of Living Calculator and the PayScale Cost of Living Calculator.

So, you want to live in New York City, huh? You want the exciting nightlife that goes past 4am (morninglife?), incredible international cuisines, food at any time of the day/night, a city in which you never get bored, and you crave the chaotic lifestyle the city demands. The question is… Can you afford it?

A couple years ago, the Daily News published an article titled “N.Y.C. So Costly You Need Six Figures to Make Middle Class”, and the information it reveals still holds truth today, (given today’s prices/costs versus those of 2009.) It discusses the findings of a study done by the Center for Urban Future. The report shows just what it means to live in New York, and why middle class here is different than other large cities in America.

“In Manhattan, a $60,000 salary is equivalent
to someone making $26,092 in Atlanta.”

Furthermore, the report claims that a New Yorker would have to make $123,322 a year to maintain the same standard of living as someone who makes $50,000 in Houston.

Yes, the salaries in New York are higher than those in other states, but when you see some of the other factors mentioned in this article, it’s no wonder 24% of New York City residents plan to make their exodus out of the most expensive city in the country (and 32nd in the world). According to “The 12 Most Expensive Cities In America” in Business Insider: The Life, the monthly rent for an unfurnished luxury two-bedroom apartment is $4,300 in New York. This is almost $2000 more than the second most expensive city in America, Los Angeles. In the city of angels, the rent reported for an unfurnished luxury two-bedroom apartment is $2,500. Other prices found in that article are quite interesting…check them out! Also, refer to my previous post, Monthly Money, and to “There is No Manhattan, New York” on thefashionpond.

One more point to make before I start boring you, (as if I haven’t already,) is an experience of my own. Last year, when I went back to my hometown on Long Island during winter break, I went to Target with my mom and bought Dannon Activia Yogurt, which, by the way, is very delicious and nutritious! I highly recommend it. Anyway, a four-pack of this yogurt cost approximately $2 at the Target on Long Island. When I went grocery shopping in the city, the identical four-pack cost around $4. I was shocked when I saw the differences in the two prices! Good thing there’s a Target in Brooklyn…

“If I can make it there, I’ll make it anywhere.” Do you think this Frank Sinatra lyric holds truth? Is it worth living here when it is so much more expensive? What’s your take on the finances of New York?